# AFFARS MP5325.7002-2

#### Mandatory Procedure

MP5325.7002-2
Domestic Non-Availability Determinations (DNAD) Under DFARS 225.7002

#### August 2007

#### TABLE OF CONTENTS

#### 1. Introduction

#### 2. Pre-Award Procedures

#### 3. Applicability of Exceptions to Specialty Metals Restrictions

4. Domestic Non-Availability Exception

#### 5. DNAD Package Contents

#### ADDENDA

#### 1: Sample DNAD Format -- Food, Clothing, Fabrics, and Hand or Measuring Tools

#### 2: Sample DNAD Format -- Specialty Metals

#### 2-1: Definitions

####

1. Introduction

Follow these Mandatory Procedures when determining to purchase restricted food, clothing, fabrics, specialty metals, and hand or measuring tools under DFARS 225.7002. The requirement to comply with these statutory and regulatory restrictions applies to procurements in excess of the simplified acquisition threshold. This MP provides pre-award procedures and help in determining the applicability of specialty restrictions when drafting a Domestic Non-Availability Determination (DNAD).It is mandatory that you use this procedure when drafting a DNAD. A DNAD must be tailored to your acquisition scenario. In some cases it may not be possible to obtain all of the data contained in the attached sample DNAD; however, contracting officers should make every effort to do so.

2. Pre-award Procedures

a. Include DFARS 252.225-7014 Alternate I (Deviation 2006-O0004) if the end item is an aircraft, missile or space system, ship, tank or automotive item, weapon system, or ammunition containing specialty metal or a component thereof, or when you are acquiring, or likely to accept delivery of first or second tier components of any of the six end items. Electronics bought on a prime contract do not require 252.225-7014, Alternate I unless they are a first or second tier component of an end item listed above or meet the de minimus exception for electronic components.

b. The DFARS clauses (Deviation 2006-O0004)also apply to service contracts, including Contractor Logistics Support (CLS) contracts, if tier 1 or tier 2 components will be delivered to and accepted by the Government during delivery or upon completion of the contract and are not incidental to services being performed by the contractor.

c. If the contractor is unable to provide compliant products, a DNAD must be approved or be in process before signing the contract. Pursuant to the September 21, 2006, Defense Procurement and Acquisition Policy (DPAP) memo on Implementation Guidance for Pre-Award Berry Amendment Compliance, if award is made while a DNAD is in process and, after award of the contract, the DNAD ultimately is not approved, the contractor must deliver compliant products. Prior to award of a contract that has a DNAD in process, the contract file must be documented to show that the contractor is aware of this requirement and concurs with it. The Contracting Officer shall also include the applicable clauses in the contract.

d. For contracts covered by the specialty metals restrictions, contracting officers must have either an approved DNAD or an exception to the specialty metals restrictions, otherwise the contractor must deliver compliant products. Contracting Officers can no longer use conditional acceptance or withholds to resolve non-compliance on new contracts entered into after November 16, 2006.

e. If the DNAD includes titanium, the Congressional Defense Committees shall be notified at least ten days before the contract to which the DNAD applies is awarded. A copy of this notification and the DNAD must also be provided to the Director, Defense Procurement and Acquisition Policy, as specified in PGI 225.7002-2(b)(4).

f. The Air Force may be able to use an existing approved DNAD if the DNAD was signed by the Undersecretary of Defense (Acquisition, Technology, and Logistics (OUSD (AT&L)) or by a Service Secretary.

1) If the DNAD was signed by (OUSD(AT&L)), and covers the specific noncompliant parts/materials and the specific time period for the DNAD covers the contract performance period, the Contracting Officer may make the determination to use the DNAD. OUSD(AT&L) DNADs that are currently available for reciprocal use are posted on the DCMA Website and in PGI 225.7002-1. The Contracting Officer’s Determination and Finding (D&F) must be approved by the Senior Contracting Official (SCO) or for AFMC and AFSPC the Senior Center Contracting Official (SCCO) if using an OUSD (AT&L) approved DNAD. This approval may be not further delegated. The Contracting Officer shall obtain legal review and may obtain engineering analysis to support the determination.

2) For the purpose of using a DNAD executed by the Army, Navy, or a DNAD previously executed by the SECAF, the Contracting Officer must determine that condition warrants reliance on the existing DNAD based on:

i) The specific non-compliant part/material is covered by the DNAD, or other factors that substantially similar conditions warrant reliance on the existing DNAD; and

ii) The specific time period of the DNAD covers the contract period of performance.

If the Contracting Officer determines that use of the existing DNAD would be appropriate, the Contracting Officer must prepare a D&F approving the use of the existing DNAD for signature by the SECAF. The Contracting Officer shall obtain legal review and engineering analysis to support the determination.

3. Applicability of exceptions to specialty metals restrictions

If a contracting officer discovers that a contractor cannot comply with specialty metals restrictions, contracting officers should determine whether an exception to the restrictions applies. There are two types of exceptions: those which are explicitly delineated in 10 U.S.C. 2533b and those for which the “domestic non-availability exception” applies. The following exceptions fall into the first category. The contracting officer can document the contract file regarding the applicability of these exceptions and continue with the instant acquisition. These exceptions are as follows:

1) Procurements outside the U.S. in support of combat operations.
2) Procurements in support of contingency operations.
3) Procurements for which the use of procedures other than competitive procedures have been approved under FAR 6.302-2, Unusual and Compelling Urgency.
4) Procurements complying with or furthering agreements with qualifying countries listed in DFARS 225.872-1.
5) Purchases for resale purposes in commissaries, exchanges, and non-appropriated fund instrumentalities operated by DOD.
6) Procurements in amounts not greater than the simplified acquisition threshold.
7) Procurements of commercially available electronic components whose specialty metal content is de minimus (not exceeding 10%) in comparison to the overall value of the lowest level electronic component produced that contains such specialty metal.

4. Domestic non-availability exception

a. If the domestic non-availability exception applies, a DNAD must be submitted to the Secretary of the Air Force for approval. OUSD(AT&L) or the Secretary of the Air Force, can grant a DNAD if compliant food, clothing, fabrics, specialty metals, and hand or measuring tools of satisfactory quality and sufficient quantity, and in the required form, cannot be procured as and when needed. This approval authority is not delegable.

b. This exception should not be read to require that compliant metal must be totally unavailable, i.e., cannot be obtained at any cost. There is some cost limit that should be recognizable by a contracting officer, and that a reasonable person would agree, makes the metal effectively “unavailable.”

c. There is no exception for commercial items.

5. DNAD Package Contents

a. Determination and Finding – Prepared by the Contracting Officer

1) Identify noncompliant parts, assemblies or components.
2) Specify when compliant parts/components will be available.
3) Specify the duration and scope (e.g., month/year, covered lot numbers, contract numbers).
4) Discussion of circumstances that preclude acquisition of compliant items and alternative acquisition strategies.
5) Discussion of contractor’s detailed market analysis and corrective action plan.
6) Impact on the program’s delivery schedule, program costs, and mission.
7) Alternatives/substitutes considered.
8) Based on above, determination that waiver is required.
9) Certification by the requiring activity and approval by the SECAF.

b. Independent government verification/validation of contractor’s market
analysis (This may not always be necessary if the contractor’s market analysis includes Government validation.)

c. In-Depth market analysis by the prime contractor

1) Analysis of the current market and efforts required to obtain compliant parts.
2) Analysis of alternate acquisition strategies.
3) Submittal of a Corrective Action Plan (CAP) outlining the steps the contractor will take to attain compliance.

ADDENDUM 1

DNAD FOR {SPECIFY} FOOD, CLOTHING, FABRICS, AND HAND OR MEASURING TOOLS

Pursuant to the authority contained in Section 9005 of Public Law 102-396, as amended, 10 U.S.C. 2533a (the “Berry Amendment”) and Defense Federal Acquisition Regulation Supplement (DFARS) 225.7002-2, I hereby make the following determination and findings concerning [insert agency], [insert contracting activity].

Findings

1. The [insert contracting activity] proposes to purchase [insert description of the item(s)] under contract number [insert contract number]. The item(s) is/are produced or manufactured in [insert country of origin]. The total estimated cost of the item(s) is [insert amount].

2. Describe the mission of the organization:

3. Describe the circumstances that preclude the buying of a domestic end item (“The Berry Amendment (10 U.S.C. 2533a) requires affected items to be domestic (i.e., of domestic origin and wholly of domestic content) unless a determination is made that such product cannot be acquired as and when needed in a satisfactory quality and sufficient quantity at U.S. market prices”).
4. Describe the market research performed, to include firms contacted.
5. Describe the impact if the waiver is not approved.
6. Describe any alternatives/substitutes considered and why these alternatives/substitutes are not satisfactory.
7. Provide any other data that will support the request.

Determination

I determine that a satisfactory quality and sufficient quantity of the above [specify item(s)] that complies with the Berry Amendment cannot be acquired nor produced as and when needed at United States market prices. This determination is made in accordance with DFARS 225.7002-2(b) and 10 U.S.C. 2533a. Based on this determination, an exception applies to the requirements of the Berry Amendment to procurement of these items.

This determination will be effective until [specify time period or program completion that specify item or program will comply with 10 U.S.C. §2533a are available.]

______________________________ ________
[NAME] DATE
SECRETARY OF THE AIR FORCE

ADDENDUM 2

DNAD FOR [SPECIFY] SPECIALITY METALS

In accordance with 10 U.S.C. §2533b, I hereby make the following findings and determination concerning acquisition of the domestic non-availability of specialty metals in [identify the program affected or, if the material/part concerned affects multiple programs, identify the specific material/part].

Findings

1. The [name of contracting activity] has an acquisition for [identify specific item at prime and subcontract level]. It was determined that this acquisition is subject to the 10 U.S.C. §2533b requirements to buy strategic materials critical to national security from U.S. sources and did not fall under any of the statutory exceptions. [Identify prime contractor] has asserted that [identify non-compliant end item, component, part, or material] cannot be obtained containing specialty metals melted or produced in the U.S. and has requested approval of a determination that is not available from domestic sources.

2. Describe the mission of the organization:

3. Describe the circumstances that preclude the buying of a domestic end item (10 U.S.C. 2533b) requiring specialty metals to be domestic. [Provide a detailed description to explain what portion of the specific item being procured at the prime contract level is not compliant. Specify whether the DNAD is for a program as a whole, a specific contract, certain deliveries, and/or specified end items, components, or parts.]

4. Describe market research performed, to include firms contacted. [Summarize the market research and analysis supporting the assertion of non-availability or include the contractor provided data as an attachment.] The [specify the activity (e.g., AFRL)] conducted an in-depth study of these items and determined that they are [provide brief summary of the analysis -- this should address the aspects of satisfactory quality, sufficient quantity, correct form, and time requirements.]

5. Describe the impact if the waiver is not approved.

6. Describe any alternatives/substitutes considered and why these alternatives/substitutes are not satisfactory.

7. Provide any other data that will support the request.

Determination

Based on the findings above, I have determined that [specify item/material] is not exempt from coverage by 10 U.S.C. §2533b, I hereby determine that satisfactory quality and sufficient quantity of complaint specialty metals in the form of [specify specific items] cannot be procured as and when needed. This determination is made in accordance with DFARS 225.7014 and /or Alternate I (Deviation 2006-O00004) and 10 U.S.C. §2533b. Based on this determination, an exception applies to the delivery of end items, and components thereof, containing [specify items] where the specialty metals contained in such items were melted or produced. [State whether or not this DNAD is available for other programs or Services to use.] This determination will be effective until [specify time period or program completion.]

______________________________ ________
[NAME] DATE
SECRETARY OF THE AIR FORCE

ADDENDUM 2 -- Attachment 1

DEFINITIONS

Specialty Metal: Any specialty metal (raw stock) acquired directly by the Government or by a prime contractor, to include subcontractors, for delivery to the Government. Specialty metals may be comprised of any one of the following: steel; metal alloys consisting of nickel, iron-nickel, and cobalt base alloys; titanium and titanium alloys; zirconium and zirconium alloys. Specialty metals procured by DOD shall be melted or produced in the United States or its outlying areas or a qualifying country, unless an exception applies or a DNAD is approved. For a precise definition, see 10 USC 2533b(i) or DFARS 252.225-7014(a)(2).

Component: First tier parts and assemblies that are incorporated directly into the end item, i.e., first tier components. Parts and assemblies that are incorporated directly into a first-tier component are also components (i.e., second tier components). Third-tier and below parts and assemblies are not components. When the Government purchases first-tier and second-tier components separately or in an end item they must be compliant. Third tier and below parts and assemblies are not components and do not have to comply with specialty metal restrictions.

De minimus: If the specialty metal content in commercial electronic components is less than 10% in value compared with the overall value of the lowest level component produced that contains such specialty metal, it meets the de minimus requirement in 10 U.S.C. 2533b. The new law creates an exception for de minimus non-compliance for commercial electronic components, thus there is no need to request a waiver for electronic components meeting this criteria.

Electrical Component: An item that operates by controlling the flow of electrons or other electrical charged particles in circuits, using interconnections of electrical devices such as resisters, inductors, capacitors, diodes, switches, transistors, or integrated circuits.

End Item: An item delivered under a line item of a contract exceeding the simplified threshold in any one of the following product categories: aircraft, missile and space systems, ships, tank and automotive items, weapons systems, and ammunition.

Source: The actual manufacturer or producer of the end item or component.

Weapons System: An item or set of items that is designed to kill or destroy the enemy.

Qualifying Country: A country listed in subsection DFARS 225.872-1.